Recovery through public works

As governments all over the world are negatively affected by the economic meltdown, some are still looking to the future to stimulate the economy, with investment in large-scale infrastructure projects taking center stage. The Chinese premier is in Berlin to secure an agreement with the Germans to partner in construction projects in China as part of a 586 billion stimulus package, highlighted by the Maglev railway project. In Spain, new high speed trains are making inroads into the dominance of air travel in that country, and more projects linking major cities are on the way. Spain’s president specifically pinpointed infrastructure projects as the heart of an “anti-recession surge in public spending” (Guardian, 1/16/09, pg. 6).

Even public opinion with regard to how these projects are funded is making splashy headlines across the pond. An article in The Guardian UK with the headline “Poll shows public want taxes that will hurt the rich” cites polling showing 70% of respondents agreeing that “those at the top don’t pay a fair share towards investment in public services” (1/9/09, pg. 14).

Meanwhile on the home front, congress passes an 850 billion economic recovery package with only 5% to go to infrastructure projects – approximately 25% of what the experts are saying is needed. And Republicans, despite losing more seats in the house and senate in the 2008 election, cry that the solution is even more tax cuts for business and the rich, which is of course their answer to everything these days.

Conservative policies have been shown to be abject failures. We give corporations huge tax breaks, and they still move jobs overseas for cheaper labor and hide profits in overseas tax havens. Exxon makes a record 45.2 billion in profits in 2008 despite 4th quarter earnings tanking, and even they acknowledge that this was due in large part to crude’s triple digit price for much of the year. Conservatives have had their chance to practice unfettered, unregulated capitalism for AT LEAST the last eight years and it has driven the U.S. economy over a cliff. Only an FDR-style rescue will save us now. Of course, when FDR is mentioned the conservative argument is that the New Deal didn’t work. Putting aside the fact that the WPA put millions of people to work when it was desperately needed, the liberal counter argument should be, “FDR didn’t go far enough!!!” In fact, it was a Republican administration, that of Dwight Eisenhower, that implemented the highest top tax rates this country has ever seen and presided over the construction of our interstate highway system through the Federal Aid-Highway Act, 90% of which was federally funded.

It doesn’t take Obama’s crack team of economic advisors to figure out how these projects saw the light of day. Do we have the political and societal will to demand that the system be changed to address the needs of the majority? Or will we continue down the abyss that is crony capitalism combined with regressive taxation. I predict that this conservative attempt to obstruct the rebuilding of America through public works will fail, because more and more people will be hurting and the political winds will move farther left, out of necessity. Government will save capitalism from itself, again, sooner or later. Hopefully for us it will be sooner.

References
Exxon Mobile sets record with 45.2 billion profit http://news.yahoo.com/s/ap/20090130/ap_on_bi_ge/earns_exxon_mobil
High Corporation Tax Rate is Misleading
http://www.smartmoney.com/investing/economy/high-corporate-tax-rate-is-misleading-22463/
Tax plutocrats to restrain their pay
http://www.law.harvard.edu/programs/olin_center/corporate_governance/MediaMentions/02-13-07_DailyReport.pdf
Famous socialist presidents – Eisenhower, Wilson, Ford
http://faithfulprogressive.blogspot.com/2008/10/famous-socialist-presidents-eisenhower.html
Red, White and Blue Highways – The Story of the U.S. Interstate
http://www.infoplease.com/spot/interstate1.html